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China Southern lands better results
By Irene Shen (China Daily)
Updated: 2007-04-18 09:55 China Southern Airlines Co, the country's biggest carrier, narrowed its fourth-quarter loss 85 percent as gains from a stronger yuan countered higher jet fuel and borrowing costs.
China Southern boosted gains from currency fluctuations 22 percent last year to 1.49 billion yuan as a stronger yuan cut costs from its dollar-denominated debts. The gain offset a 16-percent rise in operating costs driven by higher fuel prices and surging interest expenses caused by the growth of its fleet. "The company is relying on the stronger yuan to make a profit," said Karen Chan, an analyst at Credit Suisse Group in Hong Kong. A plan to add more overseas routes is "good for the company's long-term growth, but it's unlikely to make a profit within three years". The yuan gained 3.3 percent last year. China Southern's full-year interest expenses climbed 28 percent to 2.07 billion yuan under international accounting standards, it said. (For more biz stories, please visit Industries)
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The carrier had a loss of 265 million yuan in the three months ended on December 31, compared with 1.8 billion yuan a year earlier. Sales rose 25 percent to 12 billion yuan. The figures were derived by subtracting nine-month results from full-year numbers filed to the Shanghai Stock Exchange by the Guangzhou, South China-based airline yesterday.